2021 (4) TMI 596 - HC - Income Tax

Applications u/s 119(2)(b) for condoning the delay and accepting the return for the assessment years 2015-16 and 2016-17 - petitioner says that since the order passed under the provision of Section 119(2)(b) does not come within the ambit of the orders specified in Section 245 of the said Act, the said order is also not appealable - HELD THAT - The department ought to have taken a justice-oriented approach instead of taking a highly pedantic approach in refusing to condone the delay on the part of the petitioner in filing the return for the assessment year 2015-16. The order dated 25th August, 2020 passed by the Principal Chief Commissioner of Income Tax (International Taxation), being the respondent no.1, in respect of the assessment year 2015-16 is set aside. The Principal Chief Commissioner of Income Tax (International Taxation), being the respondent no.1, is directed to reconsider the petitioner s application made for condoning the delay and accepting the return for the assessment year 2015-16. The petitioner should communicate this order to the Principal Chief Commissioner of Income Tax (International Taxation), immediately. The Principal Chief Commissioner of Income Tax (International Taxation), being the respondent no.1, should decide the matter within a period of two months from the date of being approached.

Issues:
1. Delay in filing the return for assessment years 2015-16 and 2016-17 under Section 119(2)(b) of the Income Tax Act, 1961.
2. Consideration of petitioner's case by the authorities in a lenient and justice-oriented manner.
3. Applicability of judgments in Bombay Mercantile Co-op. Bank Ltd. v. Central Board of Direct Taxes and Cosme Matias Menezes (P.) Ltd. v. Commissioner of Income-tax, Goa.
4. Ignorance of law as a ground for condoning the delay in filing the return.
5. Setting aside the order of the Principal Chief Commissioner of Income Tax (International Taxation) for the assessment year 2015-16.
6. Direction to reconsider the petitioner's application for condoning the delay and accepting the return for the assessment year 2015-16.

Analysis:
The petitioner filed applications under Section 119(2)(b) of the Income Tax Act, 1961, seeking to condone the delay in filing returns for the assessment years 2015-16 and 2016-17. While the return for 2016-17 was accepted after condoning the delay, the return for 2015-16 was not accepted due to the delay not being condoned. The petitioner argued that a lenient and justice-oriented approach should have been adopted by the authorities instead of a highly pedantic one. The petitioner contended that a stringent view would frustrate the basic object of Section 119(2)(b) of the Act. The petitioner approached the High Court invoking the writ jurisdiction, urging the authorities to consider the application for condoning the delay and accepting the return for 2015-16 in a more lenient manner.

The petitioner relied on judgments from Bombay High Court to support their argument. The respondents, on the other hand, argued that ignorance of law cannot be a valid ground for condoning the delay in filing the return. They requested the dismissal of the writ petition based on this contention. After considering the submissions and materials on record, the judge found the ratio of the cited judgments applicable to the case. The judge opined that a justice-oriented approach should have been taken by the department instead of a pedantic one in refusing to condone the delay for the assessment year 2015-16.

Consequently, the order of the Principal Chief Commissioner of Income Tax (International Taxation) for the assessment year 2015-16 was set aside. The Principal Chief Commissioner was directed to reconsider the petitioner's application for condoning the delay and accepting the return for 2015-16, with a mandate to decide the matter within two months from the date of being approached. The judge clarified that the decision was made solely for the purpose of deciding the writ petition and not on the merits of the case. The writ petition was disposed of without any order as to costs, and since no affidavits were called for, the allegations in the petition were deemed to have not been admitted.

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